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Understanding the MID Assessment Formula

The MID’s assessment formula was updated as part of the 2013 renewal process in an effort to create more transparency and predictability while maintaining previous efforts to ensure different property types are assessed fairly. In addition to a base formula, several “ceilings” come into effect for specific property types. An inflationary factor is applied to most years of the assessments, while property values are updated twice during the ten years using the King County Tax Assessor data.

Annual MID assessments are calculated from a formula prescribed in the MID’s authorizing ordinance that was adopted in May 2013. For the past three years, ratepayers have been assessed according to a property’s 2011 total taxable value (TTV). The ordinance states that in Year 3, the Assessment Formula is to be updated to include a property’s 2015 TTV in the calculation.

In 2016, this adjustment of the formula, combined with new construction and development, led to $9.85m in total MID assessments. Today, total MID assessments represent 0.04 percent of the total taxable value of the Metropolitan Improvement District. Additionally, a growing share of MID ratepayers has reached an assessment ceiling and will likely receive annual adjustments for inflation going forward. New construction and development, which has accounted for a significant share of the MID’s increase in total assessments since 2013/2014, will play an increasingly important role in future MID assessment growth.

Timeline

2013

In 2013, the assessments were calculated according to the assessment formula, utilizing 2012 King County assessor values.

2014

In 2014, Ratepayers which existing in 2013 and whose building square footage remained the same or decreased are assessed by increasing their 2013 assessment by the Consumer Price Index for the Seattle region (CPI-U), which was 1.3%, with some exceptions. Other ratepayers were assessed utilizing 2014 King County assessor values multiplied by cumulative CPI-U factor.

2015

In 2015, Ratepayers which existing in 2014 and whose building square footage remained the same or decreased are assessed by increasing their 2014 assessment by the Consumer Price Index for the Seattle region (CPI-U), which was 1.84%, with some exceptions. Other ratepayers were assessed utilizing 2015 King County assessor values multiplied by cumulative CPI-U factor.

2016

In 2016, the assessments were calculated according the assessment formula, utilizing 2016 King County assessor values or the commensurate values from the 2013 assessment, whichever is greater, multiplied by the cumulative Consumer Price Index for the Seattle region (CPI-U) of 1.3% (2013), 1.84% (2014), and the 2015 CPI-U.

2017

In 2017, Ratepayers which existing in 2016 and whose building square footage remained the same or decreased are assessed by increasing their 2016 assessment by the Consumer Price Index for the Seattle region (CPI-U) or 3%, whichever is less, with some exceptions. Other ratepayers were assessed utilizing 2017 King County assessor values multiplied by cumulative CPI-U factor.

Seattle-Tacoma-Bremerton CPI-U and Cumulative CPI-U for Assessment

Assessment Year

CPI-U%

Cumulative CPI-U Factor

2013

Not Applicable

1

2014

1.3%

1.013

2015

1.84%

1.0316

2016

1.36%

1.0457

* 2017 CPI-U and Cumulative CPI-U will be available in January 2017If Seattle-Tacoma-Bremerton CPI-U is more than 3% for a specific assessment year, then 3% is used to calculate the cumulative CPI-U Factor for calculation for that year.

Assessment Formula & Rationale

Formula

Rationale

Rate

Notes

Assessment / $1,000 TAV

Reflects differential benefit associated with different land uses, investment value of property within land uses, and economic activity. $0.3

$0.37

Total Budget set to 2% over 2012; Ratio set to 45% Value to 55% Land Area

Assessment / Land Sq. Ft. R

Reflects common level of services to all benefitting properties.

$0.32

Total Budget set to 2% over 2012; Ratio set to 45% Value to 55% Land Area. Multiply by Cumulative CPI-U Factor.

Ceiling Rationale & Factor Calculation

Ceillings

Rationale

Factor

Calculation

TAV Ceiling

Assures that properties are not unfairly assessed compared to benefits received.

About the MID

The Metropolitan Improvement District (MID) is a non-profit service
organization that provides maintenance, safety and hospitality services, as well as destination marketing, research and market analysis for Downtown Seattle.

Founded by the Downtown Seattle Association in 1999, the MID is financed through tax assessments on Downtown properties and covers a 285 square block area in Downtown Seattle’s core. Each day, over 70 MID ambassadors patrol the streets of the Belltown, Denny Triangle, Pioneer Square, Retail Core, Waterfront and West Edge neighborhoods in order to maintain Seattle’s healthy, vibrant urban core.

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